Fraud in Emerging Markets: A Cross Country Analysis

Cross Cultural Management: An International Journal, Vol. 16, pp. 301-316, 2009

27 Pages Posted: 11 Feb 2009 Last revised: 14 May 2014

See all articles by Christopher J. Skousen

Christopher J. Skousen

Utah State University - School of Accountancy

Brady J. Twedt

University of Oregon - Lundquist College of Business

Date Written: March 27, 2009

Abstract

The purpose of our research is to determine the likelihood of financial statement manipulations in companies throughout a variety of emerging market countries and compare this potential to that of firms within the United States. We do this by utilizing the Fraud Score Model as set forth by Dechow, et al. (2007). By adjusting their model to work in an international setting, we are able to study nine industries across twenty-three countries, including the United States. The results vary industry to industry, with some countries performing extremely well in one industry only to prove remarkably risky in the next. Our findings may be used by a variety of market participants, especially investors, to determine the risk levels of potential foreign investments. Therefore, this research can help lead to a more overall efficient placement of global capital.

Keywords: Emerging Markets, Fraud

JEL Classification: M41, M43, M47

Suggested Citation

Skousen, Christopher J. and Twedt, Brady J., Fraud in Emerging Markets: A Cross Country Analysis (March 27, 2009). Cross Cultural Management: An International Journal, Vol. 16, pp. 301-316, 2009, Available at SSRN: https://ssrn.com/abstract=1340586

Christopher J. Skousen (Contact Author)

Utah State University - School of Accountancy ( email )

College of Business
Logan, UT 84322-3540
United States

Brady J. Twedt

University of Oregon - Lundquist College of Business ( email )

Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States

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